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Here’s How to Squeeze a Lesson Out of Facebook’s IPO
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Your students may have hundreds of friends on Facebook including founder Mark Zuckerberg. But would they consider buying Facebook stock now that the company has issued an IPO? Do they even know what an IPO is? This current event opens the door to squeeze in a last minute lesson on buying stocks and investing that could fit into any high school economics or social studies class.
Here are some tips on how to implement it.
The Mission:
You are Joe or Jane Doe Mega Bucks interested in buying a hot stock. Your students, broken out into teams, will represent several investment firms. Their mission, should they accept it, is to find out if Facebook is a good stock buy for you. If they think it is, the need to recommend how much you should buy and explain why. If they don’t recommend buying it, they need to justify their position too.
Research First:
Instruct your students to research what an IPO is and the history of the best known tech company public offerings. How did those companies fare on the market? Where are they now? Based on their research, have them create a checklist on what investors should look for when planning to invest in tech companies.
Here are some articles to help with that effort:
- How an IPO Works - CNNMoney
- How an IPO Works - How Stuff Works
- The largest IPOs in History - CNBC
- The Facebook Offering: How it Compares - The New York Times
- Nine Things You Should Know About Facebook's IPO - Business Week
Investigate Facebook:
Have your students investigate Facebook. How did the company begin? How did it grow? How is it making money now? What are Facebook’s strengths as a company? What are its weaknesses? Who are its competitors? Instruct your students to come up with a company analysis or summary of Facebook.
Get Industry Insider Help:
Have your students reach out to investment companies, business journalists or analysts to discuss the value of buying or passing on buying Facebook stock. Tell them to find out how much money you as an investor need to fork over. If they decide you shouldn’t buy the stock, make sure they recommend something else.
Final Analysis:
After they have researched and investigated, have each team give you a presentation on their findings and recommendations. Based on their information and presentations, pick a winning investment group. Their prize - Facebook stock - if you can get it! Or Facebook credits?
At any rate, you will have motivated your students to exercise research and literacy skills.
Try this out and let us know whether you decided to buy Facebook stock based on your "investment group's" recommendations.